Going by the numbers delivered and commentary, appears that demand has resumed after two quarters of softness (in line with managment commentary last quarter).
Overall, 10% Y-o-Y and 76% Q-o-Q revenue growth. EPS has been flat Y-o-Y at~12 Rs., mostly attributed to inventory losses in this quarter and higher other expanse (management indicating about higher R&D investments – now and going ahead).
Some notes from GTBL investor presentation for Q1FY24 (link):
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The current quarter witnessed normalization of the tendering process leading to strong growth on sequential basis with the topline growing by 76% quarter-on-quarter. The demand for the current products (Rifa S and Rifa O) remains strong.
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New API block is expected to be commissioned by October 2023, which is an essential part of our strategy of moving up the value chain. This would increase the product portfolio of the Company.
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The first phase of the new R&D center and cGMP pilot facility is also expected to be commissioned by December 2023
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The R&D expense is likely to remain elevated for few more quarters.
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For full year FY’23, PP&E change from 18 Crs. to 32 Crs. CWIP increased from 12Crs to 21 Crs.
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Open to both Organic and Inorganic opportunities for growth in Specialty Chemical space
Some notes from recent released credit rating report (Care rating):
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An increase in the quantity sold (198,313 kg in FY23 from 174,689 kg in FY22) with an increased demand of the products in FY23.
[ this despite soft demand situation in Q3 and Q4 for FY’23]
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Sales realisation improved to ₹7,469 per kg sold in FY23 compared to ₹6,537 per kg sold in FY22
[this too despite soft demand situation in Q3 and Q4 for FY’23!! ]
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PAT margin improved marginally to 38.91% in FY23 vis-à-vis 37.98% in FY22 on account of a decline in interest expenses.
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GTBL’s operations remained working capital-intensive and the cycle elongated to 67 days in FY23 vis-à-vis 56 days in FY22, mainly on account of funds stuck in inventory and debtors
Thanks,
Tarun
Disc: Invested, no transaction in last 60 days
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